Ahead of this coming week’s Fed meeting and universally expected rate cut, Chris discusses the parallels to the late 2024 Fed rate cutting…which resulted in a substantial RISE in longer-term interest rates. Much of the setup is same this time around; but there are a few key differences we discuss. Still in all, the gargantuan levels of federal debt/deficits, set to continue, will combine with sticky inflation to keep borrowing costs high for most everyone BUT the federal government. Meanwhile, both economic activity and some credit markets dynamics (high delinquencies for credit card debt, sub-prime auto loans and commercial mortgages, to name a few biggies) suggest more chickens coming home to roost. Risks are tilted toward long-overdue corrections for virtually all “risk asset” categories…gold will most likely be the ongoing big winner.
